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Bloomberg broke the story on Wednesday evening that Apple will hold one of its grand media events "very soon" - likely on or before Valentine's Day 2011 - to announce a new partnership with Verizon. According to the report, Apple will use this occasion to reveal a new CDMA version of the popular Apple handset - one that is compatible with Verizon's network.

Customers are expected to stampede to the new pairing, leaving AT&T (T), until now the exclusive U.S. distributor of the iPhone, with an enormous problem.

It is clear, however, that Apple will not be ending its relationship with AT&T. Instead, Apple will simply be ending its exclusive relationship with AT&T - an agreement that has been in place since the iPhone's 2007 debut. Bloomberg's coverage asserts that Apple's introduction of the Verizon iPhone will not take place at the Consumer Electronics Show in Las Vegas next week as initially thought. This information comes "a person familiar with Apple's plans who is not authorized to discuss them publicly."

While many prospective iPhone buyers and current owners are dubious about the carrier expansion, AT&T has not taken any chances during the past twelve months. Like at no time before in the carrier's history, AT&T has been rolling out one promotion after the next to convince subscribers to extend their contracts for another two years. And, for the most part, it's worked. "In part by easing the cost of upgrading to Apple's new iPhone 4," Bloomberg reports, "it enticed 15 million of its 23 million iPhone subscribers to sign new two-year contracts."
Bloomberg/Businessweek